Addressing the Critical Need for Regulatory Changes in Workers’ Compensation Laws – Starting with Hawaii 

04 Jul, 2024 Claire Muselman


Honolulu, HI ( -- An incident at Hawaii State Hospital in late 2023, where employees witnessed the brutal murder of their colleague, Justin Bautista, has urgently brought to light a critical flaw in the workers' compensation system. Despite the undeniable trauma experienced by these workers, their claims for psychological care were denied, leaving them to struggle without the support they desperately need. This situation underscores the pressing need for immediate and decisive regulatory changes in workers' compensation laws. 

The Incident and Its Aftermath 

On Nov. 13, 2023, Justin Bautista, a well-liked nurse at Hawaii State Hospital, was fatally stabbed by a patient with a history of aggressive behavior. Four of Bautista’s colleagues, who witnessed the attack and tried to help him, were subsequently denied workers' compensation for the psychological trauma they endured. Dr. Scott Miscovich, who submitted the workers' comp claims on behalf of these employees, described the state’s actions as “unconscionable,” emphasizing that this delay in care will only exacerbate their trauma. 

Bautista’s colleagues are not alone in their struggles. The psychological toll of witnessing such a violent event is profound, with potential long-term effects on mental health. According to Dr. Miscovich, these employees have been experiencing symptoms typical of post-traumatic stress disorder (PTSD), including sleeplessness, anxiety, and flashbacks. Despite this, the state Department of Human Resources Development has refused to approve their workers' compensation claims, citing the need for further investigation. 

The Inadequacies of Current Workers' Compensation Regulations 

This tragic event underscores the inadequacies of current workers' compensation regulations, particularly concerning psychological injuries. The state's refusal to promptly approve these claims reflects a broader issue within the system: the need for timely and appropriate support for workers who experience traumatic events on the job. The delay in approval means that employees are left to seek treatment on their own, often at significant personal cost, while they wait for a determination. 

State Rep. Scot Matayoshi, chairman of the House Labor and Government Operations Committee, expressed frustration over the state's handling of these claims. He noted that the state denies workers' compensation claims much higher than other employers, an issue he plans to investigate further. Matayoshi's concerns highlight a systemic problem that requires immediate attention and reform.

“These workers were clearly on the job,” Matayoshi said. "It's hard for me to conceptualize how this would not be covered by workers' compensation. I just don't see any other facts that could explain why this could be denied, even if it's denied pending investigation." 

The Human Cost of Delayed Compensation 

The human cost of delayed workers' compensation is immense. For the employees at Hawaii State Hospital, the denial of their claims means that they are unable to access the psychological care they need to cope with their trauma. This denial affects their mental health, ability to return to work, and overall quality of life. The financial burden of paying for treatment out of pocket can be overwhelming, adding to the stress and anxiety they are already experiencing. 

Dr. Miscovich has been vocal about the need for these employees to receive prompt and appropriate care. He has seen firsthand the impact that workplace violence can have on healthcare workers, having treated numerous hospital staffers injured by patients over the past decade. "This is something that could be with them, literally, for the rest of their lives," he said, emphasizing the long-term and potentially devastating consequences of untreated psychological trauma. 

The Broader Implications for Workers and Employers 

The denial of compensation for these hospital workers is not an isolated incident but part of a systemic trend that affects many state employees. This situation raises a critical question: Will health insurance fill the gap if workers' compensation laws are not reformed to support employees better? The reality is that the cost of inadequate workers' compensation ultimately falls on health insurance, burdening employers and employees alike. When workers' compensation claims are denied, health insurance often becomes the primary source of coverage for the resulting healthcare costs, leading to increased premiums and overall costs for both employers and employees. 

Employers must recognize that failing to support workers through effective workers' compensation will lead to increased health insurance claims, which can drive up premiums and overall costs. Both workers' compensation and health insurance are essential for protecting employees. Workers' compensation is intended to cover the medical expenses related to workplace injuries. When workers' compensation claims are denied, health insurance often becomes the primary source of coverage for these injuries, leading to increased premiums and overall costs for both employers and employees. Employers must understand that ignoring one will inevitably impact the other. 

The Financial and Ethical Imperative for Change 

From a financial perspective, the current system is unsustainable. Employers must carry workers' compensation and health insurance. Yet, the burden of untreated workplace injuries and trauma often shifts to health insurance when workers' compensation claims are denied. This shift not only increases health insurance costs but also leads to higher premiums for employers and employees. It is a vicious cycle that can only be broken through comprehensive regulatory reform. 

Ethically, the denial of workers' compensation for psychological injuries is indefensible. Employees who experience traumatic events at work deserve the same level of care and support as those who suffer physical injuries. The failure to recognize and address the psychological impact of workplace violence sends a message that mental health is less important than physical health, a notion that is both outdated and harmful. It's time to uphold our moral responsibility and ensure equal treatment for all workplace injuries. 

The Need for Regulatory Change 

The current regulatory framework for workers' compensation must be revised to ensure employees receive the care they need, particularly for psychological injuries. This care includes: 

1. Timely Approval of Claims: Streamlining the process for approving workers' compensation claims, especially for psychological injuries, is crucial to ensure employees receive immediate support. This process could involve setting clear guidelines for assessing psychological injuries and providing a standardized approach to evaluation. Additionally, reducing bureaucratic hurdles that delay approval can help employees access necessary care without unnecessary waiting periods. 

2. Comprehensive Coverage: Expanding coverage to include psychological injuries and trauma is essential to recognize the profound impact these can have on workers' health and well-being. This expanded coverage should encompass counseling, therapy, and other mental health services crucial for recovery and rehabilitation. The workers' compensation system can better address employee health needs by providing comprehensive support. 

3. Increased Accountability: Holding employers and state agencies accountable for providing adequate support to workers is vital to ensure that claims are handled fairly and efficiently. This accountability could involve regular audits of workers' compensation practices, ensuring compliance with established guidelines, and identifying areas for improvement. Furthermore, imposing penalties for unjustified denials can deter negligent behavior and promote a more responsible approach to claim management. 

4. Supportive Work Environments: Encouraging employers to create supportive work environments prioritizing employee well-being is fundamental to fostering a healthy workplace culture. This support includes training managers and staff to recognize and respond to psychological trauma, equipping them with the skills to provide appropriate assistance. Fostering a culture that values mental health can lead to a more engaged and resilient workforce, ultimately benefiting employees and employers. 

5. Legislative Advocacy: Advocating for legislative changes that protect workers and ensure they receive the support they need is crucial for modernizing the workers' compensation system. Policymakers must work together to update workers' compensation laws, reflecting the realities of modern workplaces and the significance of mental health. We can create a more equitable and effective system that genuinely supports all employees by prioritizing these legislative efforts. 

The case of the Hawaii State Hospital workers is a stark reminder of the urgent need for reform in workers' compensation laws. Employers and policymakers must work together to create a system that genuinely supports employees in their time of need. Without these changes, we risk failing individuals who dedicate their lives to helping others. It is time to prioritize the well-being of our workers by ensuring they receive the care and support they deserve, whether through workers' compensation or health insurance. 

In memory of Justin Bautista and the support of his colleagues, let us advocate for a more compassionate and effective workers' compensation system. 

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    About The Author

    • Claire Muselman

      Meet Dr. Claire C. Muselman, the Chief Operating Officer at, where she blends her vast academic insight and professional innovation with a uniquely positive energy. As the President of DCM, Dr. Muselman is renowned for her dynamic approach that reshapes and energizes the workers' compensation industry. Dr. Muselman's academic credentials are as remarkable as her professional achievements. Holding a Doctor of Education in Organizational Leadership from Grand Canyon University, she specializes in employee engagement, human behavior, and the science of leadership. Her diverse background in educational leadership, public policy, political science, and dance epitomizes a multifaceted approach to leadership and learning. At Drake University, Dr. Muselman excels as an Assistant Professor of Practice and Co-Director of the Master of Science in Leadership Program. Her passion for teaching and commitment to innovative pedagogy demonstrate her dedication to cultivating future leaders in management, leadership, and business strategy. In the industry, Dr. Muselman actively contributes as an Ambassador for the Alliance of Women in Workers’ Compensation and plays key roles in organizations such as Kids Chance of Iowa, WorkCompBlitz, and the Claims and Litigation Management Alliance, underscoring her leadership and advocacy in workers’ compensation. A highly sought-after speaker, Dr. Muselman inspires professionals with her engaging talks on leadership, self-development, and risk management. Her philosophy of empathetic and emotionally intelligent leadership is at the heart of her message, encouraging innovation and progressive change in the industry. "Empowerment is key to progress. By nurturing today's professionals with empathy and intelligence, we're crafting tomorrow's leaders." - Dr. Claire C. Muselman

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